Effect of Feed Costs on Egg Costs

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In 2002, the United States government encouraged the production of ethanol and other bio-fuels through a combination of tax benefits and direct subsidies. Since most of the ethanol produced in the United States comes from corn, this program increased the demands for corn supplies. In 2002, 11 % of available U. S. Corn was used for ethanol production. However, by 2008, 30 % of the U.S. corn crop was used for ethanol production. The increased demand for corn supplies as a result of the diversion of significant amounts of corn for bio-fuel combined with the increased world demand for feed grains resulted in unprecedented feed price increases beginning in 2006. Table I shows the increased costs of important poultry feed ingredients from September 2006 through July 2008.